Scope 2: Indirect Energy Emissions
Scope 2 emissions are indirect greenhouse gas emissions from the generation of purchased or acquired electricity, steam, heating, or cooling consumed by the reporting company. These emissions physically occur at the facility where energy is generated, not where it is consumed.
Scope 2 Accounting Methods
Location-Based Method
The location-based method reflects the average emissions intensity of the grids on which energy consumption occurs. It uses grid-average emission factors that represent the average emissions of the electricity generation in a defined geographic area.
- •Uses average emission factors for the local electricity grid
- •Reflects the physical reality of energy consumption
- •Provides a consistent basis for comparison across organizations
- •Simple to calculate with publicly available grid emission factors
Market-Based Method
The market-based method reflects emissions from electricity that companies have purposefully chosen. It derives emission factors from contractual instruments such as energy attribute certificates, renewable energy contracts, or supplier-specific information.
- •Uses emission factors from contractual instruments
- •Allows recognition of renewable energy purchases and certificates
- •Reflects company's energy procurement decisions
- •Requires certificates of origin or similar documentation
Note on Grid Losses
Transmission and distribution losses (grid losses) that occur between the generation facility and the point of consumption are NOT included in Scope 2. These losses are reported under Scope 3 Category 3: Fuel and Energy-Related Activities.
Selko Emissions
Selko uses the location-based method as the default and mandatory approach, in alignment with the VSME standard. The market-based method is available as a voluntary additional data point for companies using renewable energy certificates or contractual instruments.
Emission Factor Methods
Location-based (Default)
Grid-average emission factors based on geographic location. Mandatory under VSME.
Market-based (Voluntary)
Emission factors from contractual instruments. Voluntary supplementary information.
Methods range from primary data (left) to modeled estimates (right)
Nuclear energy is excluded from the renewable portion when calculating energy mix breakdowns. Certificates of origin can be used to provide detailed breakdown of the energy mix for market-based reporting.